ETF Bond Type: Floating Rate Bonds
ETFs, or exchange traded funds, are a type of investment that allows individuals to invest in a basket of assets in a single transaction. ETFs can be purchased and sold on major stock exchanges, and they often track an underlying index, such as the S&P 500. Floating rate bonds ETFs are a specific type of ETF that includes bonds with variable interest rates. These ETFs offer investors exposure to bonds with rates that reset on a regular basis, typically every three months. As a result, floating rate bond ETFs can be less sensitive to changes in interest rates than traditional bond ETFs. In addition, floating rate bond ETFs often have lower durations than traditional bond ETFs, which means they may be less volatile. For these reasons, floating rate bond ETFs can be an attractive option for investors seeking to diversify their portfolio.